A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

January 23, 2008

"It was easy for any competent macroeconomist to recognize that the housing market was in the midst of an unsustainable bubble. By its peak in 2006, the run-up had generated more than $8 trillion in housing bubble wealth. It was inevitable that this bubble would burst and wreak the sort of havoc that we are now seeing.

The housing bubble was allowed to expand to such dangerous proportions because the Fed was not run by a competent macroeconomist. It was run by Alan Greenspan, who used to be the greatest central banker of all time.

Greenspan did nothing to stem the growth of the bubble. In fact, he encouraged its growth by recommending that people take out adjustable rate mortgages. He also dismissed the views of the competent macroeconomists who tried to warn of the bubble, assuring the markets that everything was under control."

"Waveline and Edward Payne have owned their San Pablo home since 1965. Their monthly mortgage payments are $3800."

They OWN their home?!?! I don't think so!

Their monthly income is $4000 and their mortgage payment is $3800 -- due to adjust up $738 in April. Until three months ago, they were paying off credit cards and the mortgage with refi cash.

The house has been refinanced over and over to the tune of $505,000 and is supposedly worth $465,000. Now, the bill has come due and they are up sh!t creek without a paddle. They face having to give up the house they can't afford.

Oh well, it was good while it lasted. But all that free money had to dry up sometime. The newspaper article presents this story as a tragedy -- the end of an American dream.

So what's next? Will they be moving to Greenspanville? Or maybe they could just walk away from the house, rent a place for a fraction of their mortgage payment and live within their means.

There are eight million stories in the Naked City. This has been one of them.

It was apparent that Greenspan was a complete and utter fool when in the early days of the subprime crisis coming to light in 2007 he publicly stated, "this whole sub-prime problem would go away, if only housing prices increased another 10%".

Well, DUH.

And if you jump out of a plane without a parachute, then gravity is not a problem UNTIL you hit the ground! His statement was like saying, "Gosh, I sure wish the ground below was at sea level, and not 1,000 ft"! Granted, it gives you a second more before impact, but the outcome will be the same....

Time for real men to pull their heads out of their asses. History will not be kind to any man who allows other men called bankers, to enslave their wives and children. The innocent will suffer terribly for what these central bankers have done. They need to be destroyed if the word freedom is to have any meaning for us.

While he may be evil as hell, I don't think Alan Greenspan is any dummy. I'm sure he knew exactly what he was doing when engineering the great real estate bubble that's now imploding. He may have even been amazed at the incredible stupidity of millions of suckers that took the bait and bought insanely overpriced houses financed with suicide loans.He bailed out just before his time bomb went off and dumped the mess into the lap of Ben Bernanke, who appears to be completely incompetent to deal with the crisis.I can see, in my minds eye, the old weasel, Greenspan laughing his head off as the tragedy unfolds.

So what's next? Will they be moving to Greenspanville? Or maybe they could just walk away from the house, rent a place for a fraction of their mortgage payment and live within their means.

I bet they could rent the same type of house for $2500/mo or a decent apartment for under $2000/mo instead of paying $4500/mo for a run down old house. That's before taxes, insurance, maintenance etc etc. Instead of feeling sorry for them, I am happy that the lender will foreclose on them. Their lives will be better and less stressful going into retirement. They will have more time to enjoy life, more disposable cash and fewer bills to worry about.

I can see, in my minds eye, the old weasel, Greenspan laughing his head off as the tragedy unfolds._____

That's right!

But even worse than that, he's sipping fine champaigne and eating caviar while his feet are being rubbed and his toes sucked by a fine, blonde Playboy bunny, as he overlooks the city below from his multimillion dollar bungalow.

He lives in pleasure, luxury and sleeps in late all warm and cozy...as Rome burns!